CoreWeave, a startup specializing in artificial intelligence and backed by Nvidia, has entered into a significant five-year agreement valued at $11.9 billion with OpenAI.
This agreement solidifies CoreWeave’s role in providing AI infrastructure for OpenAI as the latter prepares for its upcoming initial public offering (IPO).
As per the terms of the deal, OpenAI will receive $350 million worth of CoreWeave shares through a private placement once the company goes public. CoreWeave has confirmed these details in a statement released on Monday, following an initial report by Reuters. Notably, CoreWeave will not be receiving any proceeds from the issuance of shares to OpenAI.
Sam Altman, the CEO of OpenAI, highlighted that this partnership enhances the infrastructure capabilities of OpenAI, with CoreWeave joining existing collaborations with Microsoft, Oracle, and the joint venture with SoftBank on the ambitious $500 billion Stargate project.
Enhancing AI Infrastructure
CoreWeave, headquartered in Livingston, New Jersey, offers access to data centers and high-performance AI chips, primarily sourced from Nvidia. The company competes with major cloud providers such as Microsoft Azure and AWS in the AI infrastructure sector.
The demand for computing power and infrastructure in the AI sector has surged as generative AI adoption continues to rise. This trend has benefited chipmakers like Nvidia and other tech giants, leading to increased interest in data centers and high-performance servers.
The agreement between CoreWeave and OpenAI comes at a time when investor interest in AI is rapidly expanding. A successful IPO could pave the way for other AI companies to enter the public stock markets, including data center operator Switch, which is reportedly contemplating an IPO with a valuation of approximately $40 billion, including debt.
Financial Performance and IPO Plans
CoreWeave filed for an IPO in March with a target valuation exceeding $35 billion, as reported by Reuters. In 2024, the company reported revenue of $1.92 billion, a substantial increase from $228.9 million in 2023. However, its net loss also grew to $863.4 million from $593.7 million the previous year.
Approximately two-thirds of CoreWeave’s revenue in 2024 was derived from Microsoft, making it the company’s largest customer. Other significant clients of CoreWeave include Meta, IBM, and Microsoft.
Since its establishment in 2017, CoreWeave has raised over $14.5 billion through 12 funding rounds, including more than $7 billion in private debt financing in 2023. The debt round was led by asset managers Blackstone and Magnetar, marking one of the most substantial private debt deals in recent times.
Morgan Stanley, JPMorgan Chase, and Goldman Sachs are spearheading CoreWeave’s debut on the stock market. The company’s shares are anticipated to be listed on the Nasdaq under the symbol “CRWV.”
Expanding Market Influence
The AI boom has reshaped the technology landscape, with companies striving to secure infrastructure to support AI-driven applications. CoreWeave’s partnership with OpenAI positions it well to capitalize on this trend by securing long-term demand for its infrastructure services, despite operating at a loss.
Altman’s recognition of CoreWeave’s role within OpenAI’s ecosystem underscores the strategic value of the agreement. This partnership will enable OpenAI to scale its AI models and provide CoreWeave with a steady revenue stream as it transitions to the public market.
CoreWeave’s IPO is expected to be one of the most closely monitored tech listings in 2025, potentially influencing other AI companies contemplating public offerings.
For more information, read about CoreWeave’s IPO preparations amidst the rapid growth of AI cloud services.
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